Contract Farming Agreements

Published 24 March 14

Contract farming is similar to share farming, the difference essentially being that a farmer uses the services of a contractor or another farmer to supply labour, machinery and management. The contractor receives a set fee for the services provided and a bonus as a percentage of the calculated profit from the venture.

The farmer remains in control of the business, engaging the contractor on defined terms, effectively purchasing services from the contractor (usually covering the day-to-day running of the farm), as well as purchasing an element of management input.

However, unlike share farming or milking agreements, the contractor gains no share of the ownership of livestock.

This option is more useful for the farmer wishing to retain control of his business as well as ownership of the farm but who does not want to render as much control of the business as a share farming agreement would imply.

DairyCo have template contracts available for producers to use in their businesses, please email publications@dairyco.ahdb.org.uk for copy.